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Example - 1. Mr. Ashok has account in the Central Bank of India. The following entries are from his pass book:-

If Mr. Ashok gets Rs.83.75 as interest at the end of the year where the interest is compounded annually, calculate the rate of interest paid by the bank in his saving bank account on 31st December, 2005.

Solution :

Month	Balance During the month	Balance on 10th	Minimum Balance	Qualifying Balance
Jan	1700, 1300	1700	1300	1300
Feb	2100, 1600	2100	1600	1600
March	1600	1600	1600	1600
April	1600	1600	1600	1600
May	1600	1600	1600	1600
June	1600	1600	1600	1600
July	1600	1600	1600	1600
August	1600	1600	1600	1600
September	1600, 2300	1600	1600	1600
Oct	2300	2300	2300	2300
Nov	2300, 1700	1700	1700	1700
Dec	2000	2000	2000	2000
			Total	20100

Let rate of interest be r

P = 20100, T = 1 month = 1/12 years

I = 83.75